{"id":5207,"date":"2015-07-04T11:05:46","date_gmt":"2015-07-04T11:05:46","guid":{"rendered":"http:\/\/newsroom247.com.ng\/?p=5207"},"modified":"2015-07-04T11:17:07","modified_gmt":"2015-07-04T11:17:07","slug":"aliko-dangote-africas-richest-man-speaks-on-oil-subsidy-investing-in-nigeria-power-agriculture-railway-construction-and-the-media-business","status":"publish","type":"post","link":"http:\/\/newsroom247.com.ng\/?p=5207","title":{"rendered":"Aliko Dangote, Africa’s richest man speaks on oil subsidy, investing in Nigeria, power, agriculture, railway construction and the media business"},"content":{"rendered":"

On oil subsidy
\nThe issue with subsidy is that government needs to block all loopholes. If there\u2019s no subsidy, it will affect our foreign exchange, we\u2019ll end up buying a dollar at N500, because there\u2019s no VAT on petroleum products. That\u2019s why the import of petroleum products is taking about 30% of our foreign reserve. We just need to make sure that there\u2019s no siphoning of money. The refining business requires volume. If you don\u2019t have a massive volume, there\u2019s no way you\u2019ll make money. Most of the refineries in Africa are running at a big loss. It\u2019s not possible for government officials to successfully manage oil businesses. It\u2019s good enough if they remove the subsidy, but you can check with neighbouring countries like Senegal. If a poor person in Senegal can afford to pay subsidy, why can\u2019t a poor person in Nigeria afford to pay. I think there must be something for the masses, which should be in terms of power, social insurance, good education system, good roads etc.<\/p>\n

By the end of 2017, we would have invested in about 16 countries and these are very heavy investments. I\u2019m going to announce the expansion of the plant we just commissioned in Ethiopia. This is just to expand our operations. It is taking 40 Megawatts of power which is more than what Kano is getting today which is 38 Megawatts. We don\u2019t have generators on standby. There is nothing like generator there which we normally have everywhere in Nigeria. It\u2019s one of the few countries that is growing at double digits because they have power and because they are a bit more serious than we are in Nigeria. You hardly find potholes on their roads. A factory like that in Nigeria would need about 60 Megawatts of power and 30 Megawatts on standby which is a total of 90 Megawatts and it would have cost us about 130 million dollars. The cost of doing business there is less. In the last twelve years, they\u2019ve had an average of 10.8% GDP growth. This year, they are running at 10.6% GDPA.
\nInvesting in Nigeria
\nThis requires determination and seriousness. These things are humanly possible and we should be able to do them. It\u2019s not really the work of the government to make a country prosperous, it\u2019s the work of individuals because the duty of the government is to facilitate, but government will not have the money to invest.
\nThat\u2019s why it\u2019s shameful that some Nigerians go and keep their money abroad. It is very difficult when we have a huge chunk of our money abroad and we want foreigners to come and invest. They won\u2019t believe that the environment is good. It won\u2019t work that way.
\nThe only way is for us to lead, even though we can\u2019t do all, but that leadership will pave the way for others to invest their money in our economy. In fairness, it\u2019s difficult for people to find a place where they can make good money like Nigeria but it is also very tough. Once you are in business in Nigeria, you won\u2019t be able to find enough sleep. Doctors always advice that we sleep for six to seven hours. I don\u2019t think people who sleep for that long can operate businesses in Nigeria(laughter).
\nOn payment of taxes
\nPeople don\u2019t pay taxes because they don\u2019t see what they are being used for. Initially, Lagosians were upset about tax payment, but they realised that it\u2019s important to pay taxes because they started seeing that the money is being used judiciously. The issue of not paying taxes is really reckless. The first thing I always think about is paying my workers\u2019 salary. We are all on the brink of danger if so many states are not paying taxes and are heavily indebted. If you do a financial analysis, you\u2019ll discover that some of the states are technically bankrupt.
\nI tell people that when you own a company, the government is automatically a shareholder.
\nThey are even guaranteed shareholders because whether you make money or not, they\u2019ll make money. If I open up a factory today, first of all, I\u2019m risking my money. I have to pay interest on money borrowed from banks. From my profit the government will take 30% as corporate tax and 2% education.
\nThe only way for me to make money from that business is to declare dividends and when I declare dividend, they\u2019ll also take 10% holding tax. You realise at the end of the day that in your own business, government is taking 42%. You begin to wonder if it makes sense. Of course it does. There\u2019s no way the government can function without taxation.
\nIf the partnership is only for us to enjoy and not pay taxes, it\u2019s not sustainable. So definitely, someone has to pay the taxes, I\u2019m not supporting an increase in taxation, I\u2019m calling for an increase in VAT because when I did the numbers, I realised that 5% additional VAT will amount to about 900 million. The most difficult thing to do in any organisation is to reduce salaries. It\u2019s much easier to reduce the number of workers. No country operates on 5% VAT, the minimum is 15%. What we don\u2019t want is social acrimony. The last strike cost us over N15 billion and we\u2019ve not gone back to the normal situation, it takes time.
\nOn power
\nThe most dangerous thing that could happen to an entrepreneur is for him to go into a business he doesn\u2019t understand. You need to know the A to Z of the business you are doing.
\nThat\u2019s the only way you can succeed. That\u2019s the biggest mistake most people are making. I don\u2019t think that most of the people that have invested in power really understand what it is. It involves three things; generation, transmission and distribution and all the three require heavy investment. There are a lot of issues that we have to resolve and I think with seriousness, we\u2019ll be able to do them.
\nWe have gas, but we shouldn\u2019t use gas alone. We took the decision that by the end of the year, all our cement plants will be using coal. The coal is there and Nigeria will not be competitive in exporting it because we don\u2019t have the infrastructure to take these coal for export. We\u2019ve started using coal and there\u2019s no emission, not a single dust anywhere.<\/p>\n

Technology has changed, 38% of power being generated in America is by coal. In our own operations, we\u2019ve discovered that running on coal is cheaper than gas. We need to see how we can build a lot of infrastructure because that would help to open up the economy and make us independent. The government has to sit down and find a solution to power.
\nWe will not have any meaningful development till we are able to sort out the power issue. We won\u2019t have an inclusive GDPA unless we tackle power. The power issue is a great one and it\u2019s preventing everyone from progressing. In Uganda, they increased the power to 230 Megawatts and the next year, their GDP grew by additional 4%.
\nTime management
\nThe biggest problem we have in Nigeria is that we don\u2019t quantify time. That\u2019s why people will sit in traffic from here to Ikeja for two to three hours. If you invite me to a place and if I\u2019m totally free and available, I\u2019ll look at how many hours it will cost me. If it will take five hours of my day, I won\u2019t go except I\u2019m going for business purposes. That\u2019s my policy. I put a lot into consideration and do some calculations, if I\u2019ll need to send someone to represent me, I do that.
\nOn refinery
\nWe are building a refinery and our refinery will make more money if there is subsidy. We have changed the size of the refinery three times because we are looking at the maximum we can do that has ever been done. We started with about 400,000, then we shifted to 500,000. Now, we took it to 650,000 barrels per day. That\u2019s the biggest ever single line thresh of refinery. It\u2019s a huge plant and it comes with a lot of challenges, but at the end of the day, it will save us a substantial amount of money. Presently, about 38% of our foreign exchange goes to petroleum products, so I think that will totally eliminate it and eliminate all the imports. We will also be able to export and we won\u2019t do it all by ourselves. Other refineries will produce. Even if other refineries are not working, we\u2019ll be able to satisfy 100% local demand and we\u2019ll be able to export massively. Five to ten people can make Nigeria a great economy. We have to encourage Nigerians to invest at home.
\nOn Agriculture
\nI think there will not be an improvement in job creation unless people go into Agriculture. I know even in Agriculture, there\u2019s money. We are also doing four sugarcane factories. We want to export sugar. We are doing a lot of sugar and rice and I think that in the next four to five years, we\u2019ll be able to create about 180,000 jobs.
\nThere are only two countries in the whole of West Africa that eat parboiled rice \u2013 Nigeria and Sierra-Leone. Other neighbouring countries eat white rice. So, what\u2019s the business of Republic of Benin collecting ships of parboiled rice to Nigeria.
\nHow can Nigeria eat two billion tons of rice? We have no business importing sugar, there\u2019s so much land and water here. God has given us these things and we have to use them. Today, Ethiopia is growing rapidly, but the mainstay of their economy is agriculture.
\nJokes
\nIt\u2019s only a Nigerian that calls an airline and even when he\u2019s told that they have 20 people on standby, he still carries his bag to the airport. We are the only people God has created that way. He will say \u2018Don\u2019t worry when I get there first\u2019. When he gets there, he starts shouting and complaining, whereas he had already been told.
\nOn gas generation
\nWe\u2019ve been wondering what the issue is, why we\u2019ve been unable to get gas. The total amount of gas that is being supplied out of the entire trillions of fields of gas that we have is only about 6.7billion of which 3.5 billion is for export energy, 1.25 billion flares, while about 1.3 is for their own operational use. A little over one billion is what we get for domestic use. We pass part of it to the West African gas pipeline in Togo and Ghana. There is a lot of gas in the east but there\u2019s no usage. Majority of them are in the shallow waters. Nobody will spend their money to generate the gas unless the infrastructure are on ground.
\nBuying Arsenal FC
\nThe issue is that if I buy all the Nigerian clubs, the Nigerian flags will continue to remain here. But buying Arsenal will take the Nigerian flag worldwide. Just like whenever Abrahamovich is mentioned, the name of his country, Russia comes up, everyone knows he\u2019s Russian.
\nOn railway construction
\nRailway is so expensive that it\u2019s only the government that can run it. The cheapest railway line is about 3.7 to 4 million dollars per kilometre.
\nIf you want to construct a railway from Lagos to Kano, you need about four and half billion dollars and that\u2019s private sector cost, not government cost. We wanted to do from Lagos to Calabar and it was about 12 billion dollars. I also think that the government should start building concrete roads, because we\u2019ve realised that concrete roads are far cheaper and they last for more than 40 years.
\nWe are doing one in Ogun State. But in any country where there\u2019s corruption, they wouldn\u2019t want to do concrete roads, because it lasts a lifetime.
\nWe\u2019ve not maximized the use of money in this country. As a country, it\u2019s shameful that we are still struggling to pay salaries. We shouldn\u2019t allow people to hear that. Ghana just had a week of power outage and everybody took to the streets with placards. They should come to Nigeria and see what we are experiencing.
\nHouses outside Nigeria?<\/p>\n

Someone once asked me how many houses I have abroad. The truth is, I don\u2019t have a nine- inch block outside this country, I don\u2019t have any house anywhere in the world outside Nigeria.
\nCautious about media business
\nI once went to see Abiola and I said to him, you look a bit worried. And he told me he could not sleep because of a publication. He said, \u201cHow many times will I be chasing reporters and running my business. Let me advise you, don\u2019t go and do this newspaper business.\u201d When people realise that the paper is not balanced \u2013 you are always pro-government, it is a challenge. The worst tag a paper can have is to be marked a government paper.
\nThe general feeling is that they are eating from the government. So that is why I run away from the media business. That\u2019s not to say I won\u2019t do it.
\n\"Dangote\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On oil subsidy The issue with subsidy is that government needs to block all loopholes. If there\u2019s no subsidy, it will affect our foreign exchange, we\u2019ll end up buying a dollar at N500, because there\u2019s no VAT on petroleum products. That\u2019s why the import of petroleum products is taking about 30% of our foreign reserve. […]<\/p>\n","protected":false},"author":2,"featured_media":5208,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"ngg_post_thumbnail":0,"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[1],"tags":[273],"class_list":["post-5207","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-aliko-dangote"],"jetpack_featured_media_url":"http:\/\/newsroom247.com.ng\/wp-content\/uploads\/2015\/07\/Dangote.jpg","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4oswh-1lZ","_links":{"self":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/5207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5207"}],"version-history":[{"count":2,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/5207\/revisions"}],"predecessor-version":[{"id":5210,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/5207\/revisions\/5210"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/media\/5208"}],"wp:attachment":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5207"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}